ARKO
Arko Corp.
Price:  
4.48 
USD
Volume:  
340,000.00
United States | Specialty Retail
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Arko WACC - Weighted Average Cost of Capital

The WACC of Arko Corp. (ARKO) is 8.9%.

The Cost of Equity of Arko Corp. (ARKO) is 9.35%.
The Cost of Debt of Arko Corp. (ARKO) is 11.35%.

Range Selected
Cost of equity 7.90% - 10.80% 9.35%
Tax rate 20.30% - 24.10% 22.20%
Cost of debt 7.10% - 15.60% 11.35%
WACC 6.4% - 11.5% 8.9%
WACC

Arko WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.87 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.80%
Tax rate 20.30% 24.10%
Debt/Equity ratio 2.14 2.14
Cost of debt 7.10% 15.60%
After-tax WACC 6.4% 11.5%
Selected WACC 8.9%

Arko's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for Arko:

cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.